As the Federal Reserve began its two-day meeting on Tuesday, cryptocurrencies were watching.
Recent months have seen the possibility of a halt to stimulative monetary policies.
Bitcoin rallied on Tuesday, but it remains below the psychologically significant $50,000 mark and well above its highs close to $70,000 set last November.
CNBC’s Trading Nation asked its traders to describe how they position their portfolios to maximize exposure to cryptospace heading into 2022.
Mark Tepper, president and CEO of Strategic Wealth Partners, stated Tuesday that he would buy right now. “I believe in crypto and I have some. But I am also a realist. You must have a certain percentage of crypto to be able to trade or own it successfully.
Tepper estimates that this is roughly 10% of his liquid wealth. He says it allows him to feel secure if he loses all but makes him happy if it rises tenfold.
“I believe you must understand that crypto rocketed from the depths of Covid due to all that liquidity that flooded it, all those [stimulus] check. Tepper stated that this is no longer a catalyst and future gains will be slower.
CNBC’s Tepper stated in an email that he has allocated 50% of his cryptocurrency position ethereum and 40% to bitcoin. 10% is for a less-known crypto, polkadot.
“100% of my crypto money is going into polkadot right now.” He said that not many people have heard about it. “The founder of the platform, Polkadot, was also co-founder of Ethereum. He basically took Ethereum’s technology and improved it. That’s where my money is right now.
Inside Edge Capital Management founder Todd Gordon says that recent weakness in cryptocurrency is likely due to a tech selloff and lower liquidity. He believes that crypto adoption by older and established investors is a positive sign that should offset any downswings.
Gordon, like Tepper, is bullish in the space. He has 3% exposure at cryptocurrencies in his portfolio, which consists of 56% Bitcoin, 35% Ethereum, 5% Solana, and 3% Cardano.
Gordon stated that if you are looking for a way to see the differences between bitcoin and ethereum, this is an old foreign currency trick. You look at cross rates, then you compare bitcoin to ethereum, then you subtract the dollar.
Although Ethereum has been compared to bitcoin in recent years, it has recently gained support at its current levels. Gordon believes that ethereum has the potential to grow if it holds this support level.